The Kerala High Court in a recent decision set aside the demand of balance tax deposit as assessee already remitted amount under section 55 of the Kerala Value Added Tax Act, 2023.
Pyramid Architects and Engineers, the petitioner, challenged the conditional order passed by the third respondent – the Kerala Value Added Tax Appellate Tribunal, Additional Bench, Kozhikode – directing the petitioner to deposit 10% of the balance tax demanded for the years, 2014-15 & 2015-16, and executing simple bond for the balance amount to the satisfaction of the assessing authority, within one month from the date of receipt of that order.
Assessment orders for the assessment years, 2014-15 & 2015-16, were passed by the first respondent, and the petitioner filed appeals before the second respondent – the Deputy Commissioner (Appeals). On dismissal of the above appeals, second appeals along with petitions for condonation of delay in filing the appeals and for stay, were filed before the third respondent.
Sri. S. Anilkumar, submitted a conditional order now passed by the third respondent is onerous and the petitioner is financially incapacitated to comply with the same.
The petitioner has raised a further contention that as per sub-section(1A) of Section 60 of the Kerala Value Added Tax Act (‘the KVAT Act’), as inserted by Section 8(25)(b) of the Kerala Finance Act, 2023, a pre-deposit of an amount equal to 10% of the disputed tax (including that paid at the earlier stage) was sufficient to get the balance amount disputed in appeal stayed.
It was further submitted that at the time of filing the first appeals, the petitioner had deposited 20% of the amount demanded and hence, the condition now imposed may be set aside.
Per Contra, Sri.V.K.Shamsudheen, the Senior Government Pleader, submitted that the petitioner did not raise any such contention before the appellate tribunal while passing the order and the aforesaid amendment came into force on 28.03.2023.
By Section 8 of the Kerala Finance Act, 2023, Section 60 of the Kerala Value Added Tax Act, 2023 was amended. By sub-section (25) (b) of section 8 of the Kerala Finance Act, 2023, sub-section(1A) was inserted under Section 60 of the KVAT Act, 2023.
It was evident from a bare perusal of the first proviso to sub-section (1A) of Section 60 of the KVAT Act that the pre-deposit amount, if any, already remitted under Section 55, (ie; at the time of filing of the first appeal), shall be adjusted towards the amount to be remitted under the sub-section. Since the petitioner had submitted that he had already remitted 20% of the amount demanded during the filing of the first appeal, he has to be exempted from paying any further amount.
A division bench comprising Justice A Muhamed Mustaque & Justice Shoba Annamma Eapen set aside the condition imposed by the third respondent to deposit 10% of the balance tax demand for both years if the petitioner had already remitted the amount under section 55 of the KVAT Act.
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